Merck has scrapped its plans to launch a £1bn (US$1.35bn) research & development (R&D) centre in London.
Merck confirmed on Wednesday that it will no longer occupy its new R&D facility in King’s Cross, which was once billed as a cornerstone of UK life sciences investment and will instead shift research activities back to the US.
The US pharmaceutical giant, known as MSD in Europe, had already begun construction on a site in London's King's Cross, which was due to be completed by 2027.
Merck also announced it will be leaving its laboratories at the London Bioscience Innovation Centre and the Francis Crick Institute by the end of the year, resulting in the loss of 125 jobs.
This comes after a report from the industry’s lobby group, the Association of the British Pharmaceutical Industry (ABPI), warned that the UK had become “uninvestable” for pharmaceutical R&D.
A spokesperson for Merck blamed the decisions on the “undervaluation of innovative medicines and vaccines by successive UK governments”.
Part of a wider retreat
Merck is not alone in scaling back UK commitments.
Earlier this year, AstraZeneca scrapped a planned £450m vaccine plant expansion in Merseyside.
In 2023, it opted to build a new manufacturing facility in Dublin rather than north-west England, citing the UK’s “discouraging” tax environment.
Swiss multinational pharmaceutical company Novartis has also warned that Britain is becoming “largely uninvestable” for innovative treatments.
UK patients have already missed out on several new launches due to declining market competitiveness.
Industry leaders argue that shrinking NHS expenditure on medicines is exacerbating the problem.
Ten years ago, pharmaceuticals accounted for 15% of UK healthcare spending, compared with around 9% today.
For other member nations of the Organisation for Economic Co-operation and Development (OECD), that figure typically ranges from 14 to 20%.
Sir John Bell, Oxford University’s Regius Professor of Medicine, warned that multinational drugmakers are increasingly unwilling to invest in the UK under current conditions.
“The large companies do have to work in a system where they can sell their products and if they can’t sell their products here, they’ll go and do their business somewhere else,” he told the BBC.
Calls for urgent action
The National Centre for Universities and Business (NCUB) has cautioned that the UK’s attractiveness as a destination for life sciences and R&D investment is under serious threat.
It has urged policymakers to deliver a long-term industrial strategy that prioritises innovation and provides greater incentives for collaboration between academia and industry.
Richard Torbett, Chief Executive of the ABPI, said Merck’s decision must serve as a “wake-up call”.
He added: “The lack of competitiveness of the UK is the big thing that’s driven the decision. We’ve got systematic under-investment in the products that come out of the end of innovation.”
Outlook for UK pharma
Despite setbacks from major multinational pharma companies, the UK retains significant strengths, including the NHS as a platform for clinical studies.
The report from the ABPI stressed that the UK stands out for its academic institutions, noting the country hosts 16 of the world’s top 100 universities for life sciences and medicine.
The report also pointed to the country’s “world-class research infrastructure”, such as the UK Biobank dataset and that the UK has a “rich ecosystem” of startup biotechnology companies.
However, unless government and industry can find ways to improve the commercial environment, experts warn that more companies may redirect investment abroad.
Merck’s decision adds to growing unease that, without urgent reforms, the UK risks falling behind its international rivals in life sciences manufacturing, innovation and R&D.